What is Fixed exchange rate system
Fixed exchange rate system (or pegged exchange rate system): This is a system in which exchange rate of a currency is fixed by government. This system makes sure stability in the foreign trade and capital movement.
Balance of payment Accounts: It is the systematic record of all economic transactions among the residents of a country and rest of the world in a specified period (1-year) of time.
suppose that an investor has an extra cash reserve of $1000000 to invest for one year. annually rate is 10%
Foreign exchange rate: The Foreign exchange rate is a price of foreign currency in terms of domestic currency.
‘Can foreign exchange markets be analyzed in similar manner as the markets for ordinary physical commodities? Do demand slope downwards and supply slope upwards for currencies?’
‘The pound has enhanced today on the foreign exchange market’ is a general media comment whenever the pound sterling appreciates. When the pound appreciates is it always excellent news for business and the economy?’
what are the techniques of balance of payment?
If a Hawaiian can produce 50 bushels of either potatoes or pineapples per acre, whereas an Idahoan manages just 3 bushels of pineapples or 30 bushels of potatoes per acre, then: (1) Idaho’s absolute drawbacks prevent gains from specialization and exchange. (2) T
Peanut butter, jelly sandwiches and tuna fish sandwiches are replacements. Assume an international agreement decreased the worldwide catch of tuna by half. The equilibrium price of grape jelly would be: (1) Increases while the equilibrium quantity is reduced. (2) Drop
Explain all the approaches of Paul Samuelson.
Flexible (or floating) exchange rate system: This is a system in which exchange rate is found out by forces of demand and supply of the foreign currencies concerned in the foreign exchange market. There is no official interference in the foreign excha
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